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Indiana business insurance: requirements and costs

Indiana has no state fund and no minimum employee count: an employer covered by the Worker's Compensation Act must insure with a private carrier or qualify to self-insure, and workers are covered from their first day.⁠7⁠8⁠15 The Indiana Compensation Rating Bureau's advisory loss costs fell 6.1% for policies effective January 1, 2026, after a 6.8% cut a year earlier.⁠1⁠3 The bureau's own data show the other side of the market: in policy year 2025, insurers' filed deviations put their rates 15.3% above the advisory level on average.⁠4

Checked against 15 sources Last reviewed How we check figures

Indiana at a glance

Workers’ comp required1+ employees; no state fund
Where employers buy itPrivate insurers
Rates set byIndiana Compensation Rating Bureau
Employer comp cost, 2023$0.57 per $100 of covered wages (US $0.98)
Comp rate index, 2024$0.71, ranked 45 of 51 (1 = most expensive)
Employer health premium, 2025$8,355 single, $23,497 family (average total premium)
Auto liability minimum25/50/25

Workers' comp in Indiana is sold only by private insurers. Rates start with the Indiana Compensation Rating Bureau (ICRB), which files advisory loss costs, advisory rates and assigned-risk rates with the Indiana Department of Insurance each year, effective January 1. NCCI does the actuarial work as the bureau's vendor and prepares the filing.⁠2⁠6 Since January 1, 1990, Indiana has used competitive rating. An insurer can adopt the advisory rates or file its own, usually by applying a loss cost multiplier to the bureau's loss costs to cover its expenses and profit.⁠4 Employers that no voluntary carrier will write can apply to the Indiana Workers Compensation Insurance Plan, where the ICRB assigns a servicing carrier.⁠5

The January 1, 2026 filing, approved and filed by the Department on September 30, 2025, cut the overall advisory loss cost level 6.1% and the advisory and assigned-risk rate levels 5.8%.⁠1 It rests on policy years 2022 and 2023 evaluated at December 31, 2024. NCCI breaks the change into experience (-6.0%), trend (-3.0%), development (+0.8%), benefits (+1.9%) and loss-based expenses (+0.3%).⁠2 Lost-time claim frequency continues a long decline, so the selected loss-ratio trends were lowered to -4.5% for indemnity and -5.0% for medical.⁠2 The benefit increase reflects updates to the medical fee schedule and the fourth step of House Enrolled Act 1153.⁠2 Combined with the January 2025 cut of 6.8%, advisory loss costs fell about 12.5% over two filings (our calculation: 0.932 x 0.939).⁠1⁠3

Those advisory cuts overstate what Indiana policyholders have actually seen. ICRB's competitive-rating table tracks three departures from the bureau level. For policy year 2025 it shows carrier deviations of +15.3%, schedule rating of -2.1% and dividends of -0.2%, for a net +13.0%.⁠4 Carrier deviations have been positive every year since policy year 2009, and the net departure has been positive since 2014.⁠4 In the late 1990s it ran the other way, reaching -22.6% in 1999.⁠4 Our reading: as the bureau's loss costs fall, many insurers have kept their own rates higher through their multipliers, so a -6.1% advisory change does not mean a 6.1% lower renewal. Ask which loss cost multiplier your carrier filed, and whether it changed when the bureau's loss costs did.

By any official measure, Indiana is a low-cost workers' comp state. NASI puts employer spending at $0.57 per $100 of covered wages in 2023, against $0.98 nationally, about 42% lower by our calculation. That is down from $0.68 in 2019.⁠11 Oregon's 2024 ranking applies each state's manual rates to the same 50 classes. It placed Indiana 45th of 51, with an index of $0.71, or 65% of the median state. Among neighbors, only Ohio ranked lower ($0.68); Kentucky ($0.76), Michigan ($0.90) and Illinois ($1.34) ranked higher.⁠12 The Oregon study used rates in effect on January 1, 2024, before Indiana's two latest cuts.⁠12 Group health is the exception. AHRQ's 2025 survey put Indiana's average single premium at $8,355, below $9,025 nationally, but Indiana employees paid $2,137 of it against $1,817 nationally. Only 17.0% of Indiana firms with fewer than 50 employees offered coverage, against 32.1% nationally.⁠13

Benefit levels are the one cost input still moving up. After four years frozen at a $1,170 maximum average weekly wage (a $780 maximum weekly benefit), the cap has risen each July since 2023 and reached $1,316 ($878 a week) for injuries from July 1, 2026 through June 30, 2027.⁠10 By our calculation, that is a 12.5% rise in the wage cap over the four steps. Scheduled impairment values rose in the same steps, to $1,970 to $4,569 per degree depending on the rating.⁠10 Higher caps raise the cost of claims from higher-paid workers first, and that flows into the next filings and into your experience modification. On the auto side, Indiana's minimum liability requirement is 25/50/25.⁠14

Workers’ compensation in Indiana

Every employer under Indiana's Worker's Compensation Act must either insure its liability with a carrier authorized in Indiana or prove to the Worker's Compensation Board that it can pay compensation directly.⁠7⁠8 The Act sets no minimum number of employees, and the Board tells workers they are covered from their first day on the job.⁠15

Who is exempt

  • Casual laborers, farm or agricultural employees, and household employees
  • Railroad employees engaged in train service
  • Sole proprietors are not employees unless they elect to include themselves
  • Corporate officers may elect not to be employees by written notice to the insurer and the Board
  • Independent contractors under IRS guidelines; they file for a certificate of exemption ($15 Board fee, $20 total with revenue clearance)

Buying coverage and who sets the rates

There is no state fund: employers buy from private insurers, which may use ICRB advisory rates or file their own rates, usually as a multiplier on ICRB loss costs.⁠4 Employers that cannot get voluntary coverage apply to the Indiana Workers Compensation Insurance Plan (assigned risk), where the ICRB assigns a servicing carrier. Since January 1, 2024, plan policies pay a 30% surcharge on standard premium above $2,750.⁠5⁠6

Latest rate decision (1 Jan 2026): Indiana Department of Insurance approved and filed ICRB's January 1, 2026 filing on Sept. 30, 2025: overall advisory loss costs -6.1%, advisory rates -5.8%, assigned-risk rates -5.8%, varying by class. It follows -6.8% loss costs and -7.2% rates on Jan. 1, 2025. Official notice.

Allowed for an employer that gives the Board satisfactory proof of its financial ability to pay compensation directly. The Board may require a security, indemnity or bond and charges a $500 initial application fee, a $250 renewal fee and a $250 late filing fee.⁠8

Penalties for going without

Violating the duty to insure under IC 22-3-5-1 is a Class A misdemeanor.⁠7 The Board can ask any employer for current proof of compliance. If you do not provide it by the tenth day after receiving the request, the Board sends a written violation notice and may assess a civil penalty of $100 per day, counted from the date of the request until you comply.⁠8 The Board must waive the penalty if you provide proof by the twentieth day after receiving the notice, and you can request a hearing to challenge it.⁠8

What Indiana employers pay

Employer workers’ compensation costs per $100 of covered wages, 2019–2023
YearIndianaUnited States
2019$0.68$1.17
2020$0.64$1.08
2021$0.60$1.01
2022$0.59$1.00
2023$0.57$0.98

Employer cost per $100 of covered wages: premiums paid by insured employers plus benefits and administrative costs of self-insured employers, divided by the wages of workers covered by workers’ compensation. The United States figure is NASI’s national total, which includes federal programs. Source: National Academy of Social Insurance (NASI), published 11 Aug 2026.

Oregon’s biennial comparison of workers’ comp rates puts Indiana’s index for rates in effect on 1 January 2024 at $0.71 per $100 of payroll, 35% below the national median of $1.09 (rank 45 of 51, where 1 is the most expensive). The index prices the same 50 risk classes, weighted by Oregon payroll, in every state, so it compares rate levels rather than what employers actually pay. Compare every state.

Employer health insurance in Indiana

Average annual premium per enrolled employee at private-sector employers, 2025
MeasureIndianaFirms under 50United States
Single coverage, total premium$8,355$7,330$9,025
Family coverage, total premium$23,497$20,362$26,281
Employee share, single$2,137–$1,817
Employers offering coverage43.1%17.0%49.2%

Average total annual premium per enrolled employee at private-sector establishments that offer health insurance; the offer rate is the share of establishments offering coverage. Small firms have fewer than 50 employees. Source: Agency for Healthcare Research and Quality (AHRQ), Center for Financing, Access and Cost Trends, 2025 survey year. All states.

Commercial auto in Indiana

Every vehicle registered in Indiana, including business vehicles, must carry at least 25/50/25 in liability limits (bodily injury per person / per accident / property damage, in thousands of dollars). Official source.

Required minimums are $25,000 per person and $50,000 per accident for bodily injury, and $25,000 for property damage.

Trucks and buses used in interstate commerce must also meet federal minimums of $750,000 to $5 million: see commercial auto minimums and what commercial auto costs.

Other Indiana rules that affect insurance costs

Hiring independent contractors

A contractor who is not covered by the Act must file for a certificate of exemption with the Board after clearance from the Department of Revenue, and file again each year. It takes effect seven business days after the Board's file stamp.⁠9⁠8 If you hire such a person, you must get a copy of the stamped certificate. Once you have it, you and your comp carrier are held harmless from that person's injury claims, and your carrier must accept the certificate.⁠8

Assigned-risk surcharge

Assigned-risk rates equal the advisory rates, but a 30% surcharge applies to standard premium above $2,750, subject to audit, since January 1, 2024. Before January 1, 2020 it was 25% above $2,500. The ICRB's actuarial committee reviews the surcharge each year with the January filing.⁠6⁠2 For a small account, moving from the plan to a voluntary carrier removes the surcharge on everything above $2,750.

Minimum premium and owner payroll

The 2026 advisory rate pages set a $160 expense constant and a $1,500 maximum minimum premium. For premium purposes, executive officers, partners, sole proprietors and LLC members or managers who are covered count at no less than $1,050 and no more than $4,900 of weekly payroll.⁠2

Indiana compared with its neighbors

Workers’ comp and health insurance costs, Indiana and neighboring states
Indiana$0.57$0.71$8,355
Illinois$0.77$1.34$9,724
Kentucky$0.73$0.76$8,936
Michigan$0.56$0.90$8,230
Ohio$0.58$0.68$8,804

Sources

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National figures: NASI (employer comp costs), Oregon DCBS (rate index), AHRQ MEPS-IC (health premiums).

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Other states

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